Accountancy leaders from around the world met in Geneva on October 12 to discuss next steps for global corporate governance reforms. With an eye to helping prevent future financial crises, they collectively supported the following points:

• The accountancy profession has a key role to play in strengthening corporate governance and facilitating the integration of governance and sustainability into the strategy, operations, and reporting of an organization.
• Boards should be focused on the long-term sustainability of their businesses. As such, corporate governance reform must include strengthening board oversight of management, positioning risk management as a key board responsibility, and encouraging remuneration practices that balance risk and long-term (social, environmental, and economic) performance criteria.
• Governance is more than having the right structures, regulation and principles in place—it is about ensuring that the right behaviors and processes are in place.
• Governance mechanisms need to be strengthened at banks and other companies to ensure better oversight of risk management and executive compensation.
• More dialogue is needed between policy makers, the accounting profession, and other financial industries to consider how we can work together effectively on a global level.

The conference, hosted by the International Federation of Accountants (IFAC) and the United Nations Conference on Trade and Development (UNCTAD), took place at the United Nations Office in Geneva, Switzerland.

Professor Mervyn King, author of the King Code on Corporate Governance, was the keynote speaker. Participants from more than 50 countries were on hand to address key questions including: What lessons has the financial crisis revealed about corporate governance? What corporate governance reforms should be developed on a global basis? And what role should the accountancy profession play?

“Professional accountants can serve as a critical link to ensure that good corporate governance is practiced,” said IFAC President Robert L. Bunting. “Accountants provide strategic direction to boards and governing bodies, aiming to ensure that risks are managed appropriately and resources are used responsibly—all key processes for facilitating sound corporate governance.”

The IFAC/UNCTAD conference was designed to allow professional accountants, corporate governance experts, and other participants to challenge current practices, exchange views on essential elements of corporate governance, and discuss best practices that will improve the current and future business and economic climate.

Mervyn King, professor at the University of South Africa, who specializes in corporate citizenship, said: “Our businesses impact society, the economy, and the environment. We are no longer distant bystanders of these organizations, but we are the stakeholders, because business impacts our society, environment, and economy.”

About IFAC

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 159 members and associates in 124 countries and jurisdictions, representing approximately 2.5 million accountants in public practice, education, government service, industry, and commerce.

About the United Nations Conference on Trade and Development (UNCTAD)

UNCTAD is the focal point of the United Nations for the integrated treatment of investment and enterprise development. Since its founding in 1964, UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development. UNCTAD is the host for the Intergovernmental Working Group of Experts on International Standards of Accounting and Reporting (ISAR). For more than 25 years, ISAR has been the focal point within the UN system for issues of corporate transparency and accounting. Through ISAR, UNCTAD works to promote international best practices in financial reporting and corporate governance disclosure and to assist developing countries to build their technical capacity in this area.

This comprehensive implementation guide is intended to help practitioners understand and efficiently apply the clarified International Standards on Auditing (ISAs) to audits of small- and medium-sized entities (SMEs). First issued in 2007 and developed with the Canadian Institute of Chartered Accountants, it is designed for use by all practitioners. Volume 1 covers the basic concepts of a risk-based audit in conformance with the ISAs.

IFAC President Robert Bunting spoke at the 2010 American Accounting Association Annual Meeting on accounting education in a global environmnent. Watch the video here.

IFAC President Robert Bunting was named as one of Accounting Today’s Top 100 Most Influential People of 2010. Read the full article here.

The Professional Accountants in Business (PAIB) Committee of the International Federation of Accountants (IFAC) today released for comment a Consultation Paper, Competent and Versatile: How Professional Accountants in Business Drive Sustainable Organizational Success, that highlights how employer expectations of professional accountants in business are expected to change in light of global trends and evolving organizational needs.

The paper analyzes these expectations in relation to eight drivers of sustainable organizational success—what companies need to do to achieve and sustain success in the changing global economic landscape. The drivers were defined based on an analysis of three long-term trends influencing organizations: globalization, complexity, and technology. The drivers provide the framework for key activities that professional accountants will be expected to perform. These activities are highlighted under the following four roles that form the cornerstones of the services provided by professional accountants: creators, enablers, preservers, and reporters of sustainable value. Previously defined in the proposed PAIB Strategy and Work Plan 2010-12, these roles have received wide support so far.

IFAC PAIB Committee Chair Roger Tabor commented, “This employer-based view of the expectations of professional accountants in business will help accountants prepare for the roles they will be expected to fill in the future. The world is changing, organizational needs are evolving, and professional accountants need to adapt their skills and competences to these changing requirements and circumstances. Our demand-driven approach will enable the global accountancy profession to ensure that its members are positioned to help drive their organization’s sustainable performance.”

The discussion questions that precede the Consultation Paper ask for feedback on, for example, the usefulness of developing an international competency framework that would cover the roles and domain of professional accountants in business, among other key topics.

Comments on the Consultation Paper are requested by November 30, 2010.

About IFAC
IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

IFAC President Robert Bunting speaks about the strategies that small- and medium-sized entities can use to secure financing during the credit crunch. Read the article here.

The International Federation of Accountants (IFAC), the global organization for the accountancy profession, welcomes the announcement by the International Financial Reporting Standards (IFRS) Foundation of the membership of the newly-created SME Implementation Group (SME IG). IFAC is pleased to note the appointment to the SME IG of two of its nominees—Robin Jarvis and Ricardo Rodil.

The group’s mission is to support the adoption and implementation of the IFRS for Small and Medium-sized Entities (IFRS for SMEs) around the world. As such, it will develop non-mandatory guidance for implementing the IFRS for SMEs in the form of questions and answers that will be made publicly available on a timely basis and make recommendations to the International Accounting Standards Board if and when needed regarding amendments to the IFRS for SMEs. The members of the group will serve a renewable term of two years from July 2010. The full list of members is available here.

“We are gratified that two of our nominees were selected to join the SME IG,” said Ian Ball, CEO of IFAC. “Both small- and medium-sized practices (SMPs) and SMEs are vital parts of the global economy. IFAC provides support to SMPs, in collaboration with our member bodies, so that they can provide high-quality services to their SME clients. We also support professional accountants in business, many of whom work in SMEs and will use the IFRS for SMEs. Providing input into international standard-setting—including auditing and assurance, ethics, and accounting standards— to help ensure that they are relevant to SMPs and SMEs is a key part of our work. Robin and Ricardo will help the SME IG fulfill its mandate by bringing invaluable insights from their professional experience, along with that drawn from their experience with IFAC’s Small and Medium Practices Committee.”

For more information about IFAC’s Small and Medium Practices Committee, see www.ifac.org/smp.

About IFAC
IFAC (www.ifac.org) is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. IFAC is comprised of 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.

The Prince’s Accounting for Sustainability Project (A4S) and the Global Reporting Initiative (GRI) announced today the formation of the International Integrated Reporting Committee (IIRC). The IIRC brings together a cross section of representatives from the corporate, accounting, securities, regulatory, NGO, and standard-setting sectors. Ian Ball, CEO of IFAC, will serve as co-chairman of the Working Group.

The objective of the IIRC is to create a globally accepted framework for accounting for sustainability that brings together financial, environmental, social, and governance information in a clear, concise, consistent, and comparable format. The intention is to help with the development of more comprehensive and comprehensible information about an organization’s total performance, prospective as well as retrospective, to meet the needs of the emerging, more sustainable, global economic model.

Please see the attached press release issued and briefing notes. For further information regarding the IIRC, please see www.integratedreporting.org.

The Small and Medium Practices (SMP) Committee of the International Federation of Accountants (IFAC) today issued the second edition of its Guide to Quality Control for Small- and Medium-Sized Practices (QC Guide) The implementation guide is intended to help SMPs understand and efficiently apply the redrafted International Standard on Quality Control (ISQC) 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements.

The first edition of the QC Guide was issued in March 2009 and went on to become IFAC’s second most downloaded publication after the Handbook of International Auditing, Assurance, and Ethics Pronouncements last year. The new edition conforms to the revised and redrafted Code of Ethics for Professional Accountants and includes various improvements based on feedback from users of the first edition. It features an integrated case study, practical checklists and forms, and two sample quality control manuals.

IFAC wishes to thank the Certified General Accountants Association of Canada (CGA-Canada) for producing the QC Guide for free and the global panel of reviewers for volunteering their time and effort to helping with its development.

“This guide will help SMPs to cost effectively implement ISQC 1 and ensure that they can provide high-quality assurance and related services to their clients,” said SMP Committee Chair Sylvie Voghel.

The PDF version of the QC Guide can be downloaded from the Publications and Resources section of the IFAC website. In addition, CGA-Canada is currently working on developing a French translation of the QC Guide. It will be available on the Translations Database of the IFAC website in September.

About IFAC

IFAC (www.ifac.org) is the global organization for the accountancy profession, dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies. It is comprised of 159 members and associates in 124 countries and jurisdictions, representing more than 2.5 million accountants in public practice, education, government service, industry, and commerce.